88 Rigs Must Exit The Market

In history, there has never that many rigs disappearing in such a short time.

The research company has found that the reduction in rig demand from oil companies current fleet hits them hard. They believe rig demand in 2014 at 262 floaters will fall to 220 in 2016.

Meanwhile, the market is flooded with new rigs – 64 new units.

24 of these will be delivered in 2015, 22 in 2016 and 18 in 2017.

Rigs with delivery this year’s had amounted to 10.

The rig owners have taken action and some owners have postponed the delivery of newbuildings, which Rystad Energy assumes sliding rigs six to 12 months – or even longer in the future.

Over the last six months we have seen rig owners responding to the weak market outlook taking out floaters to improve the balance between supply and demand. In 2015 this will apply to 49 rigs – which is a record of one year, says Joachim Björni, in Rystad Energy.

The last we saw the corresponding figure was after the oil crisis in 1985.

Rig owners must still take out 36 units for 2016 to balance flows-demand, given a utilization on average 83 percent.

In 2017 it is expected that the need to retire rigs will be far less, due to increase in demand.